Moelis: ‘Market-Rate Projects Are Almost Impossible’ to Finance

Despite all that discussion of “green shoots” last year, the real estate finance market remains intractable, according to developer Ron Moelis.

In an interview with The New York Times, Mr. Moelis said that financing development of market-rate projects remains “almost impossible.” Financing for affordable housing projects, on the other hand, is somewhat easier to come by:

The banks have some federal requirements to lend for affordable housing. We have a 26-year track record—we have construction and management in-house and a good record with the commercial banks—so we’re finding the banks almost coming to us.

The financing is less risky in some ways, but it can also be very mind-numbing. Oftentimes you’re putting together four or five different sources of capital. And most low-income projects are done with a variety of subsidies, the biggest one of which is tax credits.